One of the latest buzzwords in mobile technology these days is augmented reality. It’s the combination of a live (real-time) view of the world that is overlaid – or augmented – with computer-generated imagery that somehow builds on what you are seeing and enhances it. Probably the most well-known example of this is a heads-up display, where the computers in an aircraft display projections on the windshield that assist pilots in navigating or firing on enemy planes or whatever. This technology is beginning to see widespread adoption, at least in an experimental stage, in both the commercial and military sectors.

This technology is now starting to see its way onto the so-called smartphones many people are now carrying in their pockets. Phones based on the Google Android OS have had this capability for a while, and now with the recent releases of the iPhone 3Gs and iPhone OS 3.1, that device is starting to see applications of augmented reality technology as well.

Tokyo Underground (iTunes App Store link, $0.99) is one such app that recently came on the scene. It’s a pretty useful travel companion, featuring all sorts of maps, guides to the various rail and subway lines in Tokyo, and a trip planner. But if you hold the phone up (so that the camera is facing where you’re looking) and activate the “Your New Eye” feature – new in version 3.0 of this app – you will see a view of whatever you’re looking at, overlaid with icons to various user-selectable Points of Interest (POI’s). Looking for a nice place to eat? Choose the type of restaurant you want (Japanese? Western-style? etc.), activate “Your New Eye,” and wherever you point your phone, if a restaurant that fits your criteria is within 1 km from where you are (determined by the iPhone’s built-in GPS and compass), you’ll see an icon on your screen representing where you should go. You can get more detailed directions if you need them, and the display updates in real-time — so as you walk toward it, you can see how far you have to go, or if you manage to drift off-course.

This is pretty cool stuff. Granted, it’s not quite on the level of something like a VISOR or Borg implants, but it’s still pretty neat, and will definitely come in handy especially if you’ve never been to Japan before.

The app is available now for purchase in the iTunes App Store for $0.99. While the rest of the features (mapping, route planning, etc.) will work on any iPhone (or even an iPod touch), the fancy Augmented Reality features are only available if you have the latest model iPhone, the iPhone 3GS.